W-2 employees have an advantage over self-employed taxpayers in regards to filing taxes. W-2 employers place them on a payroll and withhold federal, state, and local taxes to file on their behalf. The employer of a W-2 employee, on the other hand, must file taxes, send a copy of the W-2 form to the employee, and send a consolidated report on Form W-3 to the Social Security Administration (SSA) each year.

Tax Defense Network Salary: Filing of W-2 Form

It is only after the withholding of all taxes that need to be paid that a paycheck is given to the employee. Even though the employer files taxes on behalf of their employees, it is advisable for employees to check and re-check how much and which taxes are required to pay to the IRS.

A W-2 form records an employee’s total earnings, Social Security earnings, Medicare earnings, federal taxes, state taxes, deductions for employee benefit plans, and other deductions. Only the employer can withhold taxes and file the W-2 form with the IRS.

Tax Defense Network Salary: Payroll Taxes & Tax Debt

If an employee or a current/former employer does not file a tax return on time without seeking IRS extension, the employee may fall into tax debt. Any irregularities when filing taxes can also lead to a back tax debt. In cases of payroll tax debt, the IRS gets particularly aggressive. If the payroll taxes are delayed after receiving a notice from the IRS, there is a probability of the IRS taking aggressive collection actions, such as a lien or a levy.

It is best to resolve a payroll tax debt as soon as possible. Apart from the interest and penalties the IRS charges, it becomes difficult to resolve a payroll tax debt case after a lien has been placed. To release a lien, which is the seizure of a taxpayer’s property, assets, wages, or bank accounts to secure payment, the services of a tax resolution firm are recommended. If the tax debt is not paid after a lien has been placed, the IRS will proceed to place a tax levy, which is taking over the ownership of the taxpayer’s property, assets, or wages to fulfill the tax debt.

Tax Defense Network Salary: Avoiding Tax Debt

W-2 employees can avoid tax debt by ensuring that their employer files their return accurately and on time. Information about Form W-2 is essential in filing correctly. Form W-2 is titled ‘Wage and Tax Statement’. The employer has until January 31 each year to provide the W-2 to their employees, and informs their employees about the information they need to put in the form. Because W-2 Forms change every year, remember to get the latest W-2 form.

Tax Defense Network has released many tax liens and levies, and resolved over $84 million in client tax debt. Tax Defense Network has resolved thousands of cases of payroll tax debt and knows of the problems taxpayers face when they are in tax debt. The resolution to help taxpayers avoid payroll tax debt includes spreading awareness about how W-2 employees can avoid getting into tax debt.